According to the equation of exchange,if the amount of money in the economy of Monetania times the velocity of money equals 800 million Monetanian dollars ($),then Monetania's
A)real GDP equals $800 million
B)nominal GDP equals $800 million
C)real GDP equals $800 million times the price level
D)nominal GDP equals $800 million times the price level
E)price level equals 8 Monetanian dollars

Question

Quizplus · Accepted Answer

The equation of exchange is MV = PY, where M is the money supply, V is the velocity of money, P is the price level, and Y is the real GDP. MV equals nominal GDP, so if MV is $800 million, then nominal GDP is $800 million.

According to the Equation of Exchange,if the Amount of Money